How income investors cope with volatile markets

AS January goes, so goes the year. Be warned. That old stock market adage is likely to be repeated time and again this year, as pundits try to get to grips with share-price volatility in the first trading month of 2019. If the final couple of trading weeks of 2018 is anything to go by, stock markets this year could be even more volatile, if that is even possible.

After all, 2018 is reckoned by many to have been one of the most nerve-wracking 12 months for stock market investors in the last few years. The S&P 500 moved by 1 per cent on more than 64 separate trading days. In 2017 there were just eight days when the index swung by 1 per cent or more. In 2016 there were 48. What's more, volatility in the US triggered violent share-price movements in other parts of the world, too. Singapore was not spared.

These 1 per cent swings can be unnerving, especially when they happen without rhyme or reason. Worse still, months of investing gains could be wiped out by a few injudicious tweets from the powers that be in the US. But volatility can cut both ways. It could also drive portfolio values higher, which again could be for no apparent reason. However, it seems that volatility is fine, provided markets rise. But it's not alright if they go down.